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Knocking on Heaven’s Door – The Eagle Ford Crude Story Part III

Eagle Ford crude production is close to 600 Mb/d as of July 2012. Most forecasts show that number increasing to about 1,200 Mb/d over the next five years. Takeaway projects being developed today to go online by 2013 have capacity for 1,650 Mb/d. The midstream companies building these projects are either wildly optimistic or they know something about Eagle Ford production that we don’t. Today we look at plans for condensate takeaway from the Eagle Ford.

First a quick series recap. In Part I we covered why the Eagle Ford shale is attracting producers like bees to a honey pot. Location less than 100 miles from Texas Gulf Coast refining centers with high production of crude oil at relatively low investment cost says it all. We learned that Eagle Ford crude fetches better prices than similar quality Bakken crudes and touched on the discounts being applied to condensate. In Part II we began our review of Eagle Ford routes to market (either south to Corpus Christi or East to Houston) by describing large scale takeaway investments by Enterprise and Koch that on their own already exceed current Eagle Ford production.

In all their literature about infrastructure projects to takeaway Eagle Ford crude production, the midstream companies are very cagey about how they differentiate between crude oil and condensate. (Learn more about condensate in the “Neither Fish nor Fowl” blog). The infrastructure investments that we described in Part II – by Koch and Enterprise, appear to be oriented towards crude oil rather than condensate. The infrastructure projects we review below are clearly aimed at condensate takeaway capacity.


NuStar Energy L.P. is a publicly traded, MLP based in San Antonio, with 8,433 miles of pipeline; 84 terminal and storage facilities, two asphalt refineries and a tiny 14,500 B/d oil refinery in San Antonio right in the middle of the Eagle Ford. Spun off from Valero, Nustar already transported crude oil, feedstocks and refined products to and from Valero’s Corpus Christi and Three Rivers refineries before Eagle Ford hit pay dirt. Nustar has rapidly built pipelines and forged agreements with gathering companies to develop 200 Mb/d of crude and condensate takeaway capacity out of Eagle Ford to Corpus Christi.

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